IMF: Time is right for an infrastructure push

A new study published in the International Monetary Fund’s (IMF) World Economic Outlook suggests there is a strong case for advanced economies to take advantage of low borrowing costs to increase spending on key infrastructure projects. The study examines the effects of public investment in a large number of countries; it claims that many advanced economies are stuck in a low growth and high unemployment environment and borrowing costs are low. The report says ‘an increase in infrastructure investmen
October 6, 2014 Read time: 2 mins
A new study published in the 7899 International Monetary Fund’s (IMF) World Economic Outlook suggests there is a strong case for advanced economies to take advantage of low borrowing costs to increase spending on key infrastructure projects.

The study examines the effects of public investment in a large number of countries; it claims that many advanced economies are stuck in a low growth and high unemployment environment and borrowing costs are low.

The report says ‘an increase in infrastructure investment could provide a much-needed fillip to demand, and it is one of the few remaining policy levers available to support growth, given already accommodative monetary policy.’

In many emerging market and developing economies, infrastructure bottlenecks are putting a brake on how quickly these economies can grow. In these regions, investment ‘could help address existing and nascent infrastructure bottlenecks,’ according to the report, going on to say ‘and in all economies it would help boost medium-term output, as higher infrastructure capital stocks expand productive capacity.’

Related Content

  • Infrastructure and the autonomous vehicle
    December 12, 2014
    Harold Worrall ponders the effect of autonomous vehicles on transportation infrastructure. For the last century the transportation industry has been focused on the supply of infrastructure to support the ever growing fleet of vehicles and the greater number of miles covered by each vehicle. Our focus has been planning, funding, designing, building and maintaining roadways. Politicians, engineers, planners, financial managers … all of us have had this focus. We have experienced demand growth since the first
    Read More
  • Infrastructure spending is an investment in economic recovery
    January 20, 2012
    Transportation funding is caught in the crossfire as the President calls for infrastructure investment and a reinvigorated Republican majority in the House pushes back on federal spending. Andrew Bardin Williams reports. Every few months some politician or pundit declares that the country is on the verge of making the most important political decision in a generation. The 2006 mid-term election; the 2008 Presidential election; the passing of the stimulus bill; healthcare reform; the mania surrounding Tea Pa
    Read More
  • Governments must look beyond short-term spending of public funds
    February 2, 2012
    Phil Pettitt, Chief Executive of innovITS, the UK's ITS Centre of Excellence, argues that governments need to look beyond the short-term when looking to pump-prime economic recovery with public funds. It seems, in the current economic climate, that a 'good' day is one in which no company is announcing job cuts or going into administration. Consumer demand is down and businesses are retrenching, cutting costs and fretting over the consequences of shrinking opportunities and order books. It has not been this
    Read More
  • Public transport key to climate change, says report
    September 19, 2014
    A new report, released in advance of United Nations Secretary-General’s Climate Summit on 23 September, claims that more than US$100 trillion in cumulative public and private spending could be saved and 1,700 megatons of annual carbon dioxide (CO2) - a 40 percent reduction of urban passenger transport emissions - could be eliminated by 2050 if the world expands public transportation, walking and cycling in cities. The report, A Global High Shift Scenario, from the Institute for Transportation Development
    Read More

Highlighted Content